BILL NUMBER: SB 376	CHAPTERED  09/23/00

	CHAPTER   581
	FILED WITH SECRETARY OF STATE   SEPTEMBER 23, 2000
	APPROVED BY GOVERNOR   SEPTEMBER 22, 2000
	PASSED THE SENATE   AUGUST 31, 2000
	PASSED THE ASSEMBLY   AUGUST 28, 2000
	AMENDED IN ASSEMBLY   AUGUST 25, 2000
	AMENDED IN ASSEMBLY   AUGUST 7, 2000
	AMENDED IN ASSEMBLY   JUNE 28, 2000
	AMENDED IN SENATE   JANUARY 3, 2000

INTRODUCED BY   Senator Ortiz
   (Principal coauthor:  Assembly Member Cox)

                        FEBRUARY 11, 1999

   An act to amend Section 42238.2 of the Education Code, relating to
school districts.


	LEGISLATIVE COUNSEL'S DIGEST


   SB 376, Ortiz.  School districts:  declining enrollment.
   Existing law requires the county superintendent of schools to
determine a revenue limit for each school district in the county for
each fiscal year.  Existing law authorizes a school district that
experiences a decline in units of average daily attendance (ADA) in
excess of 8% due to a military base closure to elect to receive
adjustments to its ADA calculation to ameliorate the effects of the
decline in enrollment.  Existing law requires the school district to
commence repayment of the loan no later than the 4th year after the
year preceding a decline in ADA.
   This bill would also allow a school district that experiences a
decline in units of ADA in excess of 5% to elect to receive
adjustments to its ADA calculation to ameliorate the effects of the
decline in enrollment if the Director of Finance determines that the
school district is likely, within 8 years of that decline, to
maintain a number of units of ADA that is equivalent to the number of
units of ADA maintained by the school district prior to the decline.
  The bill would require the school district to commence repayment of
the loan not later than the 4th year after the year preceding a
decline in ADA.


THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:


  SECTION 1.  Section 42238.2 of the Education Code is amended to
read:
   42238.2.  (a) (1) Notwithstanding Section 42238.5 or any other
provision of law, a school district that meets any of the following
conditions shall be entitled to an adjustment to its units of average
daily attendance pursuant to this section:
   (A) The school district experiences a decline in the number of
units of average daily attendance in excess of 8 percent of its total
average daily attendance as a result of the closure of a facility
operated by a branch of the United States Armed Forces in the school
district's boundaries.
   (B) The school district experiences a decline in the number of
units of average daily attendance that is less than 8 percent but at
least 5 percent of its total average daily attendance as a result of
the closure of a facility operated by a branch of the United States
Armed Forces in that school district's boundaries, upon a finding by
both the Superintendent of Public Instruction and the Director of
Finance that both of the following conditions exist:
   (i) The school district demonstrates that at the end of a
three-year period the school district will experience a 10-percent
reduction in the amount of funding that the school district would
otherwise have received from state apportionments, funding received
pursuant to the California State Lottery Act of 1984 (Chapter 12.5
(commencing with Section 8880) of Division 1 of Title 2 of the
Government Code), and funding received pursuant to Title VIII of
Public Law 103-382, as a result of the loss of pupils related to the
closure of a facility operated by a branch of the United States Armed
Forces.
   (ii) The fiscal crisis and management assistance team established
pursuant to Section 42127.8 has reviewed the school district's
finances and has found that the school district has taken significant
steps to reduce expenditure.
   (C) The school district experiences a decline in the number of
units of average daily attendance in excess of 5 percent of its total
average daily attendance and the Director of Finance determines that
the school district is likely, within eight years of that decline,
to maintain a number of units of average daily attendance that is
equivalent to the number of units of average daily attendance
maintained by the school district prior to the decline.
Notwithstanding subdivision (b), loan repayments shall commence no
later than the fourth year after the base year or at a later time, as
determined by the Director of Finance.
   (2) For purposes of this section, the year preceding a decline
shall be the base year.
   (b) In the second year after the base year, the district average
daily attendance pursuant to Section 42238.5 may, if the district
chooses, be increased by 75 percent of the difference between the
base year units of average daily attendance and the units of average
daily attendance in the first year of decline.  In the third year
after the base year, the district average daily attendance pursuant
to Section 42238.5 may, if the district chooses, be increased by 50
percent of the difference between the base year units of average
daily attendance and the units of average daily attendance in the
first year of decline.  The amount of money represented by these
increases shall be considered a loan to the school district.  Loan
repayments shall commence no later than the fourth year after the
base year.
   (c) (1) The Superintendent of Public Instruction, in consultation
with a school district subject to this section, shall determine a
schedule for repayment of the total amount loaned pursuant to this
section which may not exceed 10 years.  Payments shall include
interest charged at a rate based on the most current investment rate
of the Pooled Money Investment Account in the General Fund as of the
date of the disbursement of funds to the school district.
   (2) Upon written notification by the Superintendent of Public
Instruction that the school district has not made one or more of the
payments required by the schedule established pursuant to paragraph
(1), the Controller shall withhold from Section A of the State School
Fund the defaulted payment which shall not exceed the amount of any
apportionment entitlement of the district to moneys in Section A of
the State School Fund.  In that regard, the Controller shall withhold
the amount of any payment made under this subdivision, including
reimbursement of the Controller's administrative costs as determined
under a schedule approved by the California Debt Advisory Commission,
from subsequent apportionments to the school district from Section A
of the State School Fund.
   (3) Any apportionments made by the Controller pursuant to
paragraph (2) shall be deemed to be an allocation to the school
district for purposes of subdivision (b) of Section 8 of Article XVI
of the California Constitution, and for purposes of Chapter 2
(commencing with Section 41200) of Part 24.
   (d) In no event shall the adjustment provided by this section
cause the apportionment to a school district to exceed the amount
that would otherwise be calculated for apportionment to the district
pursuant to Sections 42238 and 42238.1.
   (e) This section does not apply to a school district that
experiences a decline in enrollment as a result of a school district
reorganization pursuant to Chapter 3 (commencing with Section 35500)
of Part 21 or any other law.
